Shennong Group(SH:605296) Huaxin Securities·2025-04-30 06:23Investment Rating - The report maintains a "Buy" rating for the company [4][7]. Core Insights - The company achieved significant revenue growth in 2024, with total revenue reaching 5.584 billion yuan, a year-on-year increase of 43.51%. The net profit attributable to shareholders was 687 million yuan, marking a substantial turnaround from previous losses [4]. - In Q1 2025, the company continued its growth trajectory, reporting revenue of 1.472 billion yuan, up 35.97% year-on-year, and a net profit of 229 million yuan, also reflecting a significant recovery [4]. - Despite anticipated declines in pig prices due to increased supply, the company is expected to maintain positive revenue growth and profitability in 2025, supported by its leading cost advantages and expanding production scale [4][5]. Summary by Relevant Sections Financial Performance - The company reported a total revenue of 5.584 billion yuan for 2024, with a growth rate of 43.5%. The projected revenues for 2025, 2026, and 2027 are 6.654 billion yuan, 8.234 billion yuan, and 10.635 billion yuan, respectively, with growth rates of 19.2%, 23.7%, and 29.2% [9]. - The net profit attributable to shareholders for 2024 was 687 million yuan, with forecasts of 524 million yuan, 158 million yuan, and 683 million yuan for the following years [9]. Cost Structure and Production Capacity - The company's total cost in March 2025 was 12 yuan per kilogram, maintaining a leading position in the industry. The company aims to keep its costs below 13 yuan per kilogram by 2025 [5]. - As of March 2025, the company had a breeding sow inventory of 128,000 heads, an increase from 121,000 heads at the end of 2024. The company plans to add 24,000 heads of capacity, with expectations for continued high growth in production [5][6]. Capital Expansion and Competitive Position - The company announced a plan to issue 12.6 million shares to raise 290 million yuan for expanding production capacity and enhancing operational efficiency. This move is expected to strengthen its competitive position in the market [6]. - The company's debt-to-asset ratio stood at 27.81% as of Q1 2025, significantly lower than its industry peers, reflecting a strong financial position [6]. Earnings Forecast - The earnings forecast has been adjusted to reflect a weak price cycle for pigs in 2025, with expected earnings per share (EPS) of 1.00 yuan, 0.30 yuan, and 1.30 yuan for 2025, 2026, and 2027, respectively [7][9].